Letters to the editor dated October 31, 2019

| Updated on October 31, 2019

GST evasion

Recent media reports have mentioned the steps taken to check large-scale evasion of the GST by way of false claim of input tax credit (ITC), which include capping of number of invoices in tune with business turnover. The government has already amended rules to restrict the ITC to 20 per cent of the eligible amount for an entity in case in case supplier has not uploaded relevant invoice.

All such steps will rather further complicate the already-cumbersome GST system. A simpler way may be to retain the ITC system only for trade activities abolishing it from manufacture and service sector. In such a scenario, only two basic GST rates of 10 and 25 per cent can replace the various GST slabs. Increasing the GST for gold, silver and diamonds etc to 10 per cent may not result in double taxation.

Cess should be replaced by additional GST slabs; petrol and diesel should also come under GST system.

Madhu Agrawal


Kashmir clampdown

Post abrogation of Article 370, a clampdown in the State was in order but it can not prolong beyond a point.

The BJP perhaps feared a political whiplash and adverse impact on its prospects in the Maharashtra and Haryana Assembly elections. Its political bravado was evidently short-lived.

But having now felt the growing national unease through the Assembly election results, the BJP must realise the futility of extending the siege in the Valley. The visit of EU MPs or any other ploy buys time but compounds the burden of remedy. International opinion is fickle; though it is favourable today, it can abruptly change tomorrow. The sooner we move on to the next phase the quicker we can put the Kashmir episode behind us.

R Narayanan


Market activity

This refers to ‘Sensex reclaims 40K as FPIs pump in $1 b in a day’ (October 31). In the context of the economic slowdown, the developments are highly significant and indicate that the fear of worse times ahead is fading. It might also be correct to say that the government’s response to the slowdown might have contributed to the market’s activity. As indicated in the article, the likely cut in personal income tax will further boost sentiment in the context of restoration of the economy.

The cut will also boost consumption, which is a necessary factor for the improvement of the economy. The reported likelihood of the ‘doing away’ with dividend distribution tax, long-term capital gains tax and the securities transaction tax are likely to boost the commercial and industrial sectors.

TR Anandan


Missing in action

This refers to ‘‘Meditating’ Rahul to skip Congress’ protests against economic crisis’ (October 31). The news that the former Congress president will skip the 10-day protests organised by his party from November 5 did not come as any surprise at all. While Congress spokesperson Randeep Singh Surjewala vehemently and dutifully tried to defend Rahul’s escape, the timing of his current trip obviously raises several eyebrows.

In fact, missing out on such a golden opportunity to confront the incumbent Modi government on several key economic issues speaks volumes not only about Rahul’s political inexperience but also his inherent inability to lead the party.

Vinayak G


Foreign investment

Apropos ‘The era of FDI-driven growth is over’ (October 31). It has been brought to focus that despite structural reforms like the GST, the Make in India initiative and the various sops for foreign investors, the quantum of foreign investment both in FDI and portfolio investment is bleak.

FDI especially, must be augmented, since its quantum was only ₹1.1 trillion in 2018, much lower than the the expected ₹6.2 trillion. There is neither steady flow of FDI for start-ups nor investor-friendly tax and labour laws. There is a dire need is to create a productive atmosphere for the foreign investors.

NR Nagarajan


Published on October 31, 2019

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